Zhipu AI Stock Plummets 22% as Rival Moonshot Unveils Massive Kimi K3 Model

Shares of Zhipu AI (HK:2513) plunged in Hong Kong trading on Friday after rival Chinese artificial intelligence startup Moonshot announced a new flagship open-weight AI model, intensifying the competitive landscape for China's rapidly developing AI sector.

Market Reaction

The company's stock slumped 22% to HK$1,209.0 as of 04:49 GMT, reaching its lowest price since June 12, according to Investing.com data. The sharp sell-off reflects investor concern over heightened competition following the announcement from Moonshot, a key rival in the race to develop powerful foundation models.

Moonshot Unveils Kimi K3

The market move was triggered by Moonshot's unveiling of Kimi K3, a model it described as the world's largest open-weight AI with 2.8 trillion parameters. The Alibaba- and Tencent-backed startup said the model features a one million-token context window and delivers competitive performance on complex tasks like coding, reasoning, and agent functions.

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Moonshot also announced that it plans to release the full model weights by July 27, a move that could accelerate adoption and development within the AI community.

Intensifying AI Competition

The launch significantly raises the stakes in China's domestic AI race, where a growing number of companies are vying for market share among enterprise customers and developers. Zhipu AI competes directly with other major players, including Alibaba, Baidu, and DeepSeek, all of which have accelerated the release of increasingly capable large language models.

This development underscores the fast-moving and capital-intensive nature of the AI industry, where technological breakthroughs from competitors can have an immediate and significant impact on market sentiment.